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Today, the price of Bitcoin (BTC) reached $ 18,815 on Binance for the first time in nearly three years. After the breakout, BTC is on track to see a new all-time high in the near term for four significant reasons.
Factors making a new record high likely are growing institutional demand, easing selling pressure, a spot-driven market rally, and the importance of breaking the $ 18,500 resistance.
Bitcoin is seeing a reduction in selling pressure
In order for Bitcoin holders to sell, they must first deposit BTC into exchanges. When BTC trading reserves decrease, it often indicates that there is low pressure on the market.
Second data from Glassnode, the year-to-date Bitcoin balance on exchanges dropped 18%. Analysts from the on-chain market analysis firm said that BTC liquidity is continuing its downward trajectory.
This trend is significant because it shows that there is almost no desire to sell Bitcoin at the current price level despite its rally from $ 3,600 to $ 18,700 within eight months.
Institutional demand is growing
After BlackRock CIO of fixed income Rick Reider discussed Bitcoin on CNBC, billionaire investor Mike Novogratz said that BTC is now an institutional asset.
During the CNBC interview, Reider said that Bitcoin is here to say and that it has the potential to evolve. He suggested that millennials prefer BTC and that strengthening the reality of digital currencies becoming traditional payment options were both major positives for BTC.
Considering institutional trends, Novogratz said 2021 would likely be good or better than 2020 for Bitcoin. He She said:
“Bitcoin is now an institutional asset. Period. The good thing is that most of the institutions haven’t arrived yet. This is why 2021 will be good or better than 2020 “.
The market is being driven by a spot-side crisis
On October 10, a cryptocurrency derivatives trader known as “Light” said Bitcoin was showing signs of a liquidity crisis on the selling side. He noticed at the time:
“Bitcoin is experiencing the beginning of a sell-side liquidity crisis. It’s always been like oil on crack. Production is completely inelastic, while demand is reflexive “.
Bitcoin’s performance over the past two quarters has represented a clear lack of sellers in the market. In particular, after the halving, which took place in May, the drop in selling pressure on BTC is a significant positive.
In addition to the drop in sellers, crypto derivatives trader “Cantering Clark” noted that the spot market leads the rest of the market. He She said:
“The spot offer is in the lead here.”
The spot market driving the derivatives market is important because the latter allows traders to use high leverage. When the futures market drives an uptrend, the uptrend becomes susceptible to large price movements.
Keeping $ 18,000 as support is key
On November 18, Bitcoin plunged from $ 18,500 to around $ 17,200, minutes after hitting a two-year high.
The stark rejection of the day showed large quantities of sell orders over $ 18,500 were placed. Today’s second breakout above $ 18,500 confirms that there is enough momentum in the market to break through crucial multi-year resistance levels and flip them to support.
Based on the combination of these four factors and the fact that global central bank policies of continuous liquidity injections can increase inflation, the likelihood of BTC securing a new all-time high will soon remain high.
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